+“Citi Issues Stark Warning On Automation Of Bank Jobs” | The Financial Times | Laura Noonan | 06/11/2018
There was a time when repetitive work in a factory was a ticket to a middle class life: a house, a car, kids you could send to college, rising wages, a vacation every year. That kind of life is more myth than reality for many Americans as the nature of work changes and automation and robots replace humans:
“Citigroup’s investment bank has suggested that it will shed up to half of its 20,000 technology and operations staff in the next five years, as machines supplant humans at a faster pace.
The forecast by Jamie Forese, president of Citi and chief executive of the bank’s institutional clients group, was the starkest among investment banking bosses in a series of FT interviews to mark the 10th anniversary of the financial crisis.
Mr Forese said the operational positions, which make up almost two-fifths of investment bank employees at Citi, were “most fertile for machine processing”.
“We’ve got 20,000 operational roles. Over the next five years could you make it 10,000?” he added, in comments that had echoes of former Deutsche Bank chief executive John Cryan’s claim that up to half of the German bank’s workforce could be replaced by technology.”
The standard response to the threat of automation and robots replacing human labor is that new technological advances will create new jobs for humans. This view is supported by history. In the late 1800s, as fossil fuels and machines changed the nature of agriculture, people moved from farms to cities where they got jobs in factories. In the late 1900s, as factories moved to other countries in search of cheap labor, people moved from industries to office buildings where they got jobs in cubicles. In both cases prosperity followed them along the way.
I call this the steady state view of human labor and technological change. It assumes a more or less constant flow of energy sources, demographic trends, capital, innovation, etc. to ensure that the future of human labor will look like the present in a way that continues to produce growth. People who hold the steady state view want us to believe that this process will continue into the future because it was true in the past. They cling to this narrative so tightly that at some point while debating it they may start talking about the transition from horse-drawn carriages to cars just to make a point that with time seems less and less obvious.
The problem with the past is that it’s hard to know just when it can no longer predict the future. I think we’re at the beginning of such a moment right now where the future of human labor is concerned. Although there is some evidence that automation and robots are destroying some human jobs without creating replacement work, we aren’t sure enough yet to let it affect public policy.
Still, technological and social changes since at least the advent of Web 2.0, faster personal computers, and cheap storage tell me that just because the steady state view of human labor and technological change was true in the past doesn’t mean that it’s true now or will be true in the future.
We know right now that the pace of technological change itself is increasing. From this it very likely follows that at some point automation and robots have to start replacing humans in most “algorithmic jobs,” those tasks (however complex) that proceed from one step to another, then start again after completion. The future isn’t just cashiers losing their jobs to software. It’s financial analysts, too.
Over time it should get more and more likely that new work opportunities created by automation will be functions that software and robots can perform more proficiently than humans, including coding and programming.
I think this process is inevitable and that nothing about the way we do things (read: late capitalism) is at all prepared for its consequences, the biggest of which is that robots don’t buy stuff.
“Robots and jobs: Evidence from the US” | CEPR Policy Portal
“The Last Human Job” | Slate
“Automation will make customer service the most in-demand job. Here’s why” | World Economic Forum
“Will Robots Set Us Free?” | Boston Review
IMAGE SOURCE: hand_robot_human_machine_woman_binary (Creative Commons)